Investigation clears INDOT official, calls for tighter ethics rules

Based on an investigation by Indiana's top ethics policeman, local and federal prosecutors declined to seek charges against former Indiana Department of Transportation Chief of Staff Troy Woodruff.

Woodruff, who resigned Thursday, faced a host of ethics questions about land sales to INDOT, possible nepotism and his involvement in a bridge project that benefited his relatives.

But following a 19-month investigation, Inspector General David Thomas concluded that Woodruff's conduct "gives rise to the appearance of impropriety" and "diminishes public trust" — but does not amount to criminal or civil violations.

In a report obtained by The Indianapolis Star Thursday, Thomas called for changes in state law to tighten controls on public officials who do business with the state, specifically those whose land is acquired under the threat of eminent domain, as Woodruff's was.

Thomas also advised INDOT to adopt policies that expressly forbid employees from working on matters involving their family members, and chided Woodruff for doing so, and INDOT for allowing it.

Moreover, Thomas urged INDOT not to allow Woodruff not to come back to work for the agency or "to profit" as contractor for a year.

INDOT spokesman Will Wingfield said Gov. Mike Pence's office directed INDOT to implement Thomas' recommendations. Pence ordered the probe early last year following an Indianapolis Star investigation into Woodruff's involvement in the I-69 project.

Woodruff didn't respond to a request for comment made this week though INDOT's press office.

Problems with disclosure

Thomas' report revealed for the first time that INDOT's own ethics officer Tiffany Mulligan had advised Woodruff in 2009 to disclose his land sales with the State Ethics Commission, but Woodruff had declined due to concerns about "drawing further attention to the matter."

Woodruff, a former lawmaker, had been criticised after he and his wife received state jobs. Some alleged the unadvertised jobs were a political reward for Woodruff's support of Daylight Saving Time, one of former Gov. Mitch Daniels signature legislative initiatives. Woodruff had broken a campaign promise with his vote, outraging voters in the district, who kicked him out of office.

Thomas bristled that Woodruff's decision not to seek an ethics opinion resulted in a cascade of questions from the public and work by his office, the Marion County Prosecutor, a Daviess County Special Prosecutor, the FBI and the U.S. Attorney's office.

"This demonstrates the critical importance of an Ethics Officer to a state agency," Thomas wrote. "It further reveals the dramatic consequences that can result from failure to follow the advice of an agency Ethics Officer."

Instead of seeking an ethics opinion, Woodruff made three vague land ownership statements on financial disclosure forms filed from 2009 to 2011.

What the forms did not say was that Woodruff and his immediate relatives sold roughly 3 acres of land INDOT, his employer. Woodruff's uncle and cousins also had sold $1.8 million in land to INDOT. Those relatives then purchased the remaining 30 acres of Woodruff's land for nearly twice what he and his family had paid.

Thomas said in his report that the payouts were in line with what other families had gotten in the area and a Federal Highway Administration review of I-69 purchases found no problems with any of the I-69 payments. He also said they found no evidence that Woodruff had influenced the prices INDOT paid his family.

State conflict-of-interest law stipulates that a public servant can be charged with a felony, carrying a maximum sentence of three years in prison, if he or she "knowingly or intentionally has a pecuniary interest in or derives a profit from a contract or purchase connected with an action by the governmental entity served by the public servant."

The law doesn't outright forbid such conflicts. It does, however, require most public servants to disclose in writing any dealings with their agency totaling more than $250 in profit and to seek clearance from the Ethics Commission.

Thomas argued that because Woodruff's deal with the state on the 3 acres involved the possibility of the government taking the property through a eminent domain, Woodruff couldn't be charged with a felony. It was not a typical contract.

However, one legal expert disputed Thomas' interpretation of one law.

David Orentlicher, a former Democratic state lawmaker who now teaches at Indiana University's Robert H. McKinney School of Law, told The Star: "It may be through a condemnation proceeding, but that sure sounds like a purchase to me."

Orentlicher also disagreed with another of Thomas' findings: That Woodruff didn't violate the state's nepotism law when his mother was hired to work in the Vincennes office. Thomas argued in his report that the hiring was legal at the time because Woodruff's mother reported to one of Woodruff's subordinates.

Thomas responded that Orentlicher was wrong on both counts and "he is welcome to send those (legal arguments) to the three prosecutors."

Other issues

Thomas' report also concluded that there was nothing illegal about Woodruff's involvement in a $770,444 bridge replacement project, though it again raised concerns about the appearance of a conflict.

In reports leaked to The Star last year, construction manager Tom Brummett described top INDOT officials ordering the replacement of approaches an overpass as the "Troy Woodruff Re-do."

In his construction logs, Brummett said that the bridge butted up to the land Woodruff sold to his uncle. That uncle had complained to Woodruff that he couldn't see over the bridge with his farm equipment and would need to use flaggers a few times a year.

Thomas wrote that Brummett later told an investigator that he didn't think the change order was made to appease Woodruff's relatives. Instead, he said he was merely upset that the state was spending all that money to fix a perfectly good bridge.

After The Star's report, INDOT sent out a memo telling its employees to keep their opinions to themselves in similar journals.

Thomas said that Woodruff "assisted" then-INDOT Commissioner Michael Cline, who made the final call to change the bridge. The report notes that others, including Daviess County officials, had complained that the bridge was unsafe for farm machinery, school buses, Amish buggies and students travelling to school. Other I-69 bridges also were changed because of the concerns.

"We challenge (Woodruff's) decision to be involved in this matter, but we also challenge the decision of INDOT not to screen (Woodruff) from any work related to the change order," Thomas wrote.

The investigation did find only one violation of the law — against Woodruff's wife, Melissa, who worked at the I-69 office.

She didn't disclose her role in the 3-acre land sale at all.

Thomas wrote while his office could pursue a fine against Melissa Woodruff, but "seeking a fine as the only penalty in this four-year investigation against the wife of the person who is accused of these many allegations seems misplaced."

Melissa Woodruff still works at INDOT. Earlier this month, Troy Woodruff started making other plans. He appeared before the state's ethics commissioners to inform them he was seeking employment with an engineering consulting firm, one that did business with INDOT. In fact, Woodruff had recently signed at least a $500,000 in state contracts.

A reluctant ethics commission warned they were unlikely to waive the one-year cooling-off period before state employees can work for state contractors, because it would be an obvious conflict of interest.

His only recourse might have been to seek a waiver from INDOT Commissioner Karl Browning. In his report, Thomas recommended against such a waiver.

Wingfield, the INDOT spokesman, said Woodruff is now going into business for himself.

Despite Thomas' criticism, Wingfield said Woodruff will be missed.

"Based upon the contributions he has made, Commissioner Browning feels the state would have benefited if Troy had stayed," Wingfield said.